The emergence of new Chinese consumers and the ‘Dining Boom’ for high quality Australian produce drove many local stocks, says CommSec Senior Economist Ryan Felsman.
“Food, wine and infant product markets, along with battery component makers for electric cars, performed strongly,” Felsman says in a review of the performance of Australian shares for 2017.
Milk and mining
“A2 Milk was the strongest performer on the S&P/ASX200 rising by 261.3% in 2017, driven by Chinese regulatory changes that boosted baby formula demand for Australian and New Zealand producers.
“The rally in metals, oil and gas prices pushed commodities and energy stocks 20% higher over the year, driving much of the gains on the local market.”
Rare earths producer Lynas was the second strongest performer with its share price rising by 198.6%.
Pilbara Minerals (up 123%), St Barbara (up 87.3%), Whitehaven Coal (up 77%), Mineral Resources (up 74.4%) and Saracen Mineral (up 70.7%) were all in the top 10 performing shares in 2017.
Retailers and telcos
Retail Food Group shares fell by 64.8% in 2017 and was the worst performer. The company owns Donut King, Brumby’s Bakery, Michel’s Patisserie, Gloria Jean’s and Crust Gourmet Pizza.
Department store operator Myer was down 52.2% and Telstra shares fell by 28.8% in 2017.
Total returns rise
The benchmark of the top 200 companies on the Australian stock exchange (S&P/ASX200 Index) rose by 7% in 2017. This was the best annual gain since 2013.
The All Ordinaries index increased by 7.8%. Total returns on Aussie shares (share prices and dividends) rose by 12.5% in 2017.
Of the 22 sub-industry sectors in the S&P/ASX200 index, all but four lifted over 2017. The household and personal products sector was the best performer on the Australian market, up 45%. The worst performer was telecommunications, down almost 27%, while retailing was down 13%.
The MidCap50 was the strongest size category, up 18%, and the Small Ordinaries was up 16%.
ASX 200 winners 2017, % gain
|A2M||The A2 Milk Company||261.3|
|SVW||Seven Group Holdings||95.3|
ASX 200 losers 2017, % loss
|SXL||Southern Cross Media||-23.3|
|SWM||Seven West Media||-23.6|
|RFG||Retail Food Group||-64.8|
Source: iress, CommSec
Things to consider: This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a Participant of the ASX Group and Chi-X Australia.